Lost Connection Error

So I've been trying to host a Minecraft server with my friend but it isn't working.

I set up the server normally and I do the port forwarding, I check my port with the open port check tool yougetsignal.com and it's open. However every time my friend tries to connect he gets a "Lost Connection Error"

Specifically:

/69.163.149.200:40348 lost connection.

On his end it just comes up with the connecting screen.

When I try to connect to myself with my public IP it gives me a similar error:

java.net.SocketException: Connection reset
at java .net.SocketInutStream.read <Unknown Source>
at java.net.SocketInputStream.read<Unknown Source>
at java.net.SocketInputStream.read<Unknown Source>
at java.io.FilterInputStream.read(Unknown Source>
at lv.a<SourceFile:144>
at qo.h<SourceFile:189>
at qo.c<SourceFile:9>
at zq.run<SourceFile:76>
/10.0.0.14:49994 lost connection

However when I connect with LocalHost it works.
It's also worked with my friends laptop (which he doesn't like using for minecraft cause it's old and useless)

Why is this happening. How can I fix it?
any advice would be appreciated.

As a side note I'm running the server from the minecraft_server.jar file dunno if this makes a difference I don't feel like it should.

I'm getting this same error. I'm hosting a server on another computer and ever since the update my client keeps crashing. Sometimes I get an 'out of memory' error but most times the client just swiftly closes on me.

When I check the server console I see the error code above. I feel like it's client-side but I'm not sure. Has anyone else experienced this?

I am having a similar problem as 68ant has posted. I also lose connection instantly upon attempting to connect to my server, but I do not recieve an error message in my cmd.exe client. I am running Java7. I verified that my port is open and port forwarding is configured. My server.properties file looks like this:

I go to the multiplayer server list in the minecraft client and my server has connection. I am trying to connect and host the server from the same computer. I am using <My IPv4>:25565 for the server address. However when I click the 'Join Server' button my command promt receives this message (This is the major source of my confusion. IDK what this address is. What do the ports mean?):

/69.163.149.200:54881 lost connection

Then the log in attempt times out and my command promt receives this message:

Disconnecting /192.168.2.4:50994: Took too long to log in
Reached end of stream

Is this problem related to the Minecraft servers? 1.2.4 released recently and I believe I am using the most up to date version of CraftBukkit.jar. I am having trouble understanding the problem because this is my first attempt at hosting a server. It's for my family. I'm trying to get this working using the method Bukkit presented on their wiki for starting a server. It is not a plugin related issue because my plugins directory is empty. What are we missing? I would prefer to use a bukkit server rather than the server file provided by minecraft.net so i can utilize plugins for ease of editing. Thanks. I will try again later to see if time or updates correct this problem as well as post here if anything changes.

EDIT:
I solved the problem I was having by using an updated version of the .jar file. I then corrected the name of the .jar file listed within my RUN.bat file. I can connect now without any problems. I had downloaded a "recommended build" from the bukkit site but it wasn't the latest version available.

@68ant:
There could be a couple things or just one causing your error. To troubleshoot, make sure java is up to date. Then you should check your file paths. The minecraft.net/download page has this to say:

If you want to run the server on any other OS or without GUI it's a bit more involved (see this wiki article for a tutorial). First make sure you can use java from the command line. On Linux and Mac OS X this should already be set up but on Windows you might have to tinker with the PATH environment variable. Download and run minecraft_server.jar (621 KB) with java -Xmx1024M -Xms1024M -jar minecraft_server.jar nogui.

You can try deleting your .jar file and start up the .exe file. This might recreate the .jar file with an updated version. Pay a visit to the wiki link from the minecraft download page if you still need help. Hope this works for you!

Type in the Server ip in the server.properties go to the start menu then type cmd click it then type ipconfig scroll down and find the ipv4 adress thats what you type in to your server properties where it says server-ip then your friends have to join your external ip to join the server so go to ipchicken search it on google and whatever the ip is they have to type that in

I'm getting this same error. I'm hosting a server on another computer and ever since the update my client keeps crashing. Sometimes I get an 'out of memory' error but most times the client just swiftly closes on me.

When I check the server console I see the error code above. I feel like it's client-side but I'm not sure. Has anyone else experienced this?

java.lang.OutOfMemoryError: Java heap space
at gq.<init>(SourceFile:67)
at mm.h(SourceFile:188)
at afn.a(SourceFile:1368)
at mj.a(SourceFile:480)
at afn.g(SourceFile:1346)
at afn.h(SourceFile:1253)
at mj.h(SourceFile:365)
at net.minecraft.server.MinecraftServer.u(SourceFile:511)
at lj.u(SourceFile:265)
at net.minecraft.server.MinecraftServer.t(SourceFile:441)
at net.minecraft.server.MinecraftServer.run(SourceFile:358)
at ky.run(SourceFile:617)

A detailed walkthrough of the error, its code path and all known details is as follows:
---------------------------------------------------------------------------------------

-- Head --
Stacktrace:
at gq.<init>(SourceFile:67)
at mm.h(SourceFile:188)
at afn.a(SourceFile:1368)
at mj.a(SourceFile:480)
at afn.g(SourceFile:1346)